To the Shareholders
Your Directors have pleasure in presenting the 51st Annual Report with AuditedFinancial Statements for the financial year ended 31st March 2018.
|FINANCIAL HIGHLIGHTS ||2017-18 ||2016-17 |
| ||Rs. Lacs ||Rs. Lacs |
|Turnover ||- ||- |
|Other Income ||21.42 ||1.79 |
|Gross Profit (Loss) before Dep. ||(518.87) ||(487.92) |
|Depreciation ||1.36 ||1.27 |
|Profit/(Loss) after Depreciation ||(520.23) ||(489.19) |
|Add/(Less) Exceptional Income/ (Losses) ||61.17 ||271.87 |
|Profit/ (Loss) before Tax ||(459.06) ||(217.32) |
|Less/ (Add) : || || |
|Provision for Taxation- Fringe Benefit Tax ||- ||- |
|ExtraOrdinary item Taxes for earlier Year ||- ||- |
|Net Profit/(Loss) after Tax ||(459.06) ||(217.32) |
CLOSURE OF MANUFACTURING OPERATIONS
As reported earlier the factory of the Company had been permanently closed down afterseeking requisite permission from Government of Uttar Pradesh under the provisions of theUttar Pradesh Industrial Disputes Act 1947. The Company is now exploring otherpossibilities so as to have optimal utilization of its real estate and other businessactivity.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
Subsequent to the date of financial statements Punjab National Bank has initiated theproceedings against the Company under Section 7 of the Insolvency and Bankruptcy Code2016 before the NCLT Allahabad Bench and other proceedings before DRT-II and RecoveryOfficer DRT-II New Delhi.
CURRENT STATUS OF OPERATIONS
Since the Company owns substantial real estate in its Endeavour to rehabilitate theCompany and to tap its resources to augment finances so as to be able to liquidate itshuge liabilities and to utilize the surplus for taking up new business activity in theCompany as authorized by the Memorandum of Association of the Company the Board ofDirectors of the Company has taken on record some new projects along with the real estatebusiness. The Company proposes to commence new project at an opportune time.
The Board of Directors met 7 (Seven) times during the period from 1st April2017 to 31st March 2018. The Directors met on 12th May 2017 20thJuly 2017 14th August 2017 30th August 2017 14thNovember 2017 27th December 2017 and 07th February 2018.
In view of the Losses suffered by the Company in the past your Directors are unable torecommend any Dividend on Equity Share Capital.
During the year under review the Company had not earned any revenue from theoperations and has reported a loss after tax of Rs. (459.06) lacs after taking intoaccount exceptional income.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company at present has six members. After the last AnnualGeneral Meeting of the Company during the year there has been certain change in the Boardof Directors of the Company.
|S. No ||Name of Director ||Category ||Date of Appointment/Cessation |
|1. ||MR. SHASHI KANT RANJAN ||INDEPENDENT DIRECTOR ||APPOINTED ON 27.12.2017 |
|2. ||MR. HEMANT KUMAR SINGH ||INDEPENDENT DIRECTOR ||RESIGNED ON 28.09.2017 |
Mr. Shashi Kant Ranjan was appointed as the Additional Director w.e.f. 27thDecember 2017 by the Board of Directors. Further in the meeting of Board of Directorsheld on July 18 2018 the Board has given their consent for regularization of hisappointment as Independent Director subject to approval of shareholders at this AnnualGeneral Meeting. The terms of appointment of Mr. Shashi Kant Ranjan were issued by theManaging Director of the Company and are available for viewing on the website of theCompany viz. www.modipon.net.
Mr. Manish Kumar Modi was appointed as the Managing Director of the Company w.e.f. 01stJune 2013 for a period of 5 years and his tenure completed on May 31 2018. AccordinglyMr. Manish Kumar Modi has offered himself for reappointment as Managing Director for afurther period of 5 years. The reappointment of Mr. Manish Kumar Modi including the termsand conditions and remuneration has also been considered and recommended by the Nominationand Remuneration Committee and the approval of the Board was also obtained in the meetingdated May 28 2018. Now the same has been put forward for approval of shareholders in thisAnnual General Meeting. And thereafter an application will be made to Central Governmentfor their approval in accordance with the provisions of Section 197 read with Schedule Vof the Companies Act 2013 as the status of Mr. Manish Kumar Modi has been changed fromResident to Non Resident of India.
KEY MANAGERIAL PERSONNEL
In pursuance of requirement of Section 203 of the Companies Act 2013 Mr. Manish K.Modi Managing Director Mr. Vineet Kumar Thareja Company Secretary & ComplianceOfficer and Mr. Vikas Bhatia Chief Financial Officer were designated as Key ManagerialPersonnel of the Company.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
As required under Section 149(7) all the Independent Directors on the Board of theCompany have issued their annual declaration stating that they meet all the criteria ofindependence as required under the Act.
STOCK EXCHANGE LISTING
The Securities of the Company are listed with the Bombay Stock Exchange.
COMMITTEES OF THE COMPANY
A. AUDIT COMMITTEE
In compliance with Section 177 of the Companies Act 2013 and Regulation 18 of SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 an Audit Committeeconsisting of three Independent Directors and one Non-executive Director has beenreconstituted during the year 2017-18. Mr. Shashi Kant Ranjan is the Chairman of the saidCommittee with Mr. Vivek Gupta Dr. M. K. Modi and Mr. Ranvir Prasad being other membersof the said Committee. The said Committee met on 12th May 2017 14thAugust 2017 30th August 2017 14th November 2017 and 07thFebruary 2018.
There were no occasions during the year where the Board of Directors did not accept therecommendations of the Audit Committee.
B. NOMINATION AND REMUNERATION COMMITTEE
In compliance with Section 178(1) and Regulation 19 of SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 the Company has reconstituted the Nomination& Remuneration Committee during the year 2017-18. The Nomination & RemunerationCommittee consist of two Independent Directors and one Non-executive Directors. Mr. VivekGupta is the Chairman of the said Committee with Dr. M.K. Modi and Mr. Shashi Kant Ranjanas Members of the Committee.-
The said Committee met on 20th July 2017 27th December 2017and 07th February 2018.
The said Committee laid down the Policy on Remuneration stating therein the positiveattributes required for the Managing Director Independent Directors and Key ManagerialPersonnel. The said policy also states the modus operandi for determining the remunerationto the above said personnel. The Policy on remuneration of the Company can be viewed onthe Company's website www.modipon.net.
C. STAKEHOLDERS' RELATIONSHIP COMMITTEE
In compliance with Section 178(5) of the Companies Act 2013 the Company hasreconstituted the Stakeholders' Relationship Committee during the year 2017-18. TheStakeholders' Relationship Committee consist of three members. Dr. M. K. Modi is theChairman of the said Committee with Mrs. Aditee Modi and Mr. Shashi Kant Ranjan as Membersof the Committee.
The said Committee met on 07th February 2018.
D. RISK MANAGEMENT COMMITTEE
The Company has also constituted a Risk Management Committee consisting of threemembers. Dr. M. K. Modi is the Chairman of the said Committee with Mr. Vivek Gupta andMrs. Aditee Modi as Members of the Committee.-
The said Committee laid down the Policy on Risk Management stating therein theobjectives and purpose of the said policy. The main objective of this policy is to ensuresustainable business growth with stability and to promote a pro-active approach inreporting evaluating and resolving those risks which are material in nature and areassociated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on material risk related issues.
RISK MANAGEMENT POLICY
The Risk Management Policy of the Company can be viewed on the Company's websitewww.modipon.net.
In compliance with Section 177 (9) of the Companies Act 2013 and Regulation 22 of SEBI(Listing obligations and Disclosures Requirements) Regulations 2015 the Company hasframed a whistleblower policy which can be viewed on Company's website www.modipon.net. Interms of the said policy the Directors and employees are given direct access to theChairman of the Audit Committee to report on alleged wrongdoings.
On account of closure of the manufacturing operations of the Company there has notbeen any export during the year. The FOB value of exports during the previous financialyear was nil.
WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy including vigil mechanism to report genuineconcerns of grievances providing direct access to the Chairperson of the Audit Committeein appropriate and exceptional cases. The Whistle Blower Policy has been posted on thewebsite of the Company www.modipon.net.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no material weaknesswas observed. Even though the Company has in place adequate internal audit system which iscommensurate with the operations of the Company the testing and evaluation of internalfinancial control over financial reporting as mentioned in the guidance note of theInstitute of Chartered Accountants of India is yet to be undertaken.
During the year the Company could not appoint an Internal Auditor because of acutefinancial position and closure of operations of the Company.
NOMINATION & REMUNERATION POLICY
Nomination & Remuneration Policy of the company as formulated and approved byNomination and Remuneration Committee in its meeting held on 1st August 2015governs Directors' appointment including criteria for determining their qualificationspositive attributes their independence and remuneration for the Directors KMPs and otheremployees. The Nomination and Remuneration Policy is posted on Company's websitewww.modipon.net.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS
Details of loan(s) guarantee and investments are given in the notes to FinancialStatements.
AMOUNT IF ANY PROPOSED TO BE TRANSFERRED TO RESERVES
During the year under review the Company has not transferred any money towards GeneralReserve.
Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is applicable on listed companies.
The Company has 6 (Six) No. of employee as on 31.03.2018.
Subsequent to the closure of the Manufacturing Operations of the Company all issues ofex-workmen/employees have been amicably resolved. The total dues of theseworkmen/employees (other than 5 workmen who have not yet collected their payment) havebeen paid. These 5 ex-workmen/employees had approached DRT-II New Delhi seeking order forpayment of dues in excess of the legal dues as paid to the other workmen/ employees.Hon'ble DRT had directed them to approach the Labour Commissioner for adjudication oftheir dues. None has approached the Labour Commissioner as directed by DRT. However asdirected by DRT the Company had deposited the amount payable to them with DRT which inthe absence of any claim by these workmen has been released by DRT to PNB.
Details as required pursuant to MCA Notification G.S.R. 646(E) dated 30thJune 2016 Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 none of the employee was in receipt of remuneration of Rs. OneCrore and Two Lacs or more per year throughout the year or Rs. Eight Lacs and FiftyThousand per month for the part of the year.
Further none of the employees holds by himself or along with his spouse and dependentchildren not less than 2% of equity shares of the Company.
It is hereby affirmed that the remuneration paid is as per the Remuneration Policy ofthe Company.
Particulars about Key Managerial Personnel
a. Pursuant to the Rule 5(1) Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the information required to be disclosed by every Listed Companiesin its Board Report are as follows:-
|Name of Director/ KMP and Designation ||Remuneration of Directors/ KMPs for FY 2017-18 ||% age increase in remuneration in FY 2017-18 ||Ratio of Remuneration to the median remuneration of employee |
|Mr. Manish Kumar Modi - Managing Director* ||1876000 ||NIL ||2.76* |
|Mr. Vineet Kumar Thareja - Company Secretary ** ||870000 ||N.A.** ||1.28 |
|Mr. Vikas Bhatia -Chief Financial Officer*** ||2100000 ||N.A.*** ||3.09 |
* The remuneration is within permissible limits as approved by MCA.
** Remuneration paid to him includes Medical Reimbursement.
*** Appointed also as CFO (KMP) w.e.f. 20.07.2017 remuneration taken as above is for aperiod of (9) Nine Months.
b. The Median remuneration (based on salary) of employees of the Company during thefinancial year 2017-18 was Rs. 680000/-.
c. The percentage increase in the median remuneration (based on salary) of employees inthe financial year 2017-18 was 6%.
d. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Since Company is a non-operational company and in view of losses nominal increase wasmade in the managerial remuneration while no increase is approved by the MCA in theremuneration of Managing Director.
e. It is hereby affirmed that the remuneration paid is as per the Remuneration Policyof the Company.
At the beginning of the financial year the balance on account of Fixed Depositsaccepted from the Public and Members stood at Rs. Nil. There was no deposit liable to betransferred to the credit of Investors' Education and Protection Fund.
The Company has not accepted any deposits during the year as envisaged under Sections73 74 & 76 of the Companies Act 2013.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANYFROM THE END OF FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT:
There has been no material change and commitment affecting the financial performanceof the Company occurred between the end of the Financial Year of the Company to which theFinancial Statements relate and the date of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
In view of the permanent closure of the Manufacturing Operations provisions relatingto furnishing of the details of (i) Conservation of Energy (ii) Research &Development and Technology Absorption and (iii) Foreign Exchange Earning and Outgo inaccordance with the Companies (Disclosure of Particulars in the Report of the Board ofDirectors) Rules 1988 are not applicable.
AUDITORS AND AUDIT REPORT
M/s B.M. Chatrath & Co. Chartered Accountants Noida (Firm Regn. No.301011E) wereAppointed as the statutory auditors for a period of Five (5) years in the Annual GeneralMeeting held on 30th September 2016. The requirement for ratification ofappointment of Auditors by Members at each Annual General Meeting has been omitted as perSection 40 of the Companies (Amendment) Act 2017 (notified on May 7 2018).
With reference to the qualifications contained in the Auditors' Report the Directorswish to state that the Notes on Accounts and Significant Accounting Policies referred toby the Auditors in their Report are self-explanatory and hence do not call for any furthercomment.
In view of permanent closure of operations the Company had applied for exemption fromthe requirement of Cost Audit. Accordingly appointment of Cost Auditor is not envisaged.
REPORTING OF FRAUDS:
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and /or Board under Section 143(12) ofthe Act and Rules framed thereunder.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Directors of your Companydeclare as under:
(i) that in the preparation of the Annual Accounts the applicable Accounting Standardshad been followed along with proper explanation relating to material departures;
(ii) that the Directors had selected such Accounting Policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the State of Affairs of the Company at the end of theFinancial year and of the Profit of the Company for that period;
(iii) that the Directors had taken proper and sufficient care for the maintenance ofadequate Accounting Records in accordance with the provisions of the Companies Act 1956for safeguarding the Assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) that in view of the permanent closure of the Manufacturing Operations of theCompany the Directors had not prepared the Annual Accounts on a going concern basis.
(v) that the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(vi) that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
The Company does not have any Subsidiary Company.
EXTRACT OF THE ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 the Extract of the Annual Return of theCompany made up as at the end of the Financial Year i.e. 31st March 2018 isattached by way of Annexure - 1 in Form MGT-9 to this report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethere under the Company had appointed M/s. Ranjeet Verma & Associates. PracticingCompany Secretary (FCS No. 6814 CP No.7463) of New Delhi as Secretarial Auditors of theCompany for the period from 1st April 2017 to 31st March 2018.
M/s. Ranjeet Verma & Associates have submitted their Secretarial Audit Report andhave issued their certificate as per the prescribed format in MR-3 to the shareholders ofthe Company which is annexed to this Report as Annexure -2. They have confirmed that theCompany has proper board processes a compliance mechanism in place and has also compliedwith the relevant statutes rules and regulations applicable to the Company. They havealso confirmed that the Company has complied with the necessary secretarial standards asapplicable.
For the Financial Year 2018-19 also Company has appointed M/s. Ranjeet Verma &Associates Vaishali (Ghaziabad) as Secretarial Auditors of the Company.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review there have been no significant and material orders passedby any regulators/courts/tribunals that could impact the Company's operations in future.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the period under review the Company has not made any loan to any third party asenvisaged under Section 186 of the Companies Act 2013.
The Company has not given any guarantee during the year.
RELATED PARTY TRANSACTIONS
As required under Section 188 of the Companies Act 2013 and Regulation 23 of SEBI(Listing Obligations and Disclosures Requirements) Regulation 2015 the Company placesbefore the Audit Committee the list of related parties with whom arrangements have beenmade for sharing of expenses of maintaining of Office and transactions of loan etc. TheAudit Committee accords its omnibus approval for such related party transactions on anannual basis. The updates on the transactions with the related parties are placed beforethe audit committee on a quarterly basis. The details are also placed before the Board ofDirectors for its information.
As required under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has formulated a policy on related party transactions andthe same was approved by the Audit Committee and the Board of Directors. The said policyhas been uploaded on Company's website www. modipon.net.
No related party transaction in the context of Section 188 of the Companies Act 2013and Regulation 23 of SEBI (Listing Obligations and Disclosures Requirements) Regulation2015 has been entered during the year under review. Pursuant to Clause (h) of sub-section(3) of Section 134 of the Act Form no. AOC-2 showing NIL details of related partytransactions for the Financial Year 2017-18 is enclosed as Annexure - 3.
FORMAL ANNUAL EVALUATION
As required under Section 134 (p) of the Companies Act 2013 read with Regulation 17and 19 and part D of Schedule II of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board of Directors approved the evaluation criteria for evaluatingthe performance of the Board of Directors its Committees and the performance ofIndependent Directors.
Accordingly as required under Schedule IV of the Companies Act 2013 read withRegulation 17 and 19 and part D of Schedule II of SEBI(Listing Obligations and DisclosureRequirements) Regulations 2015 the Independent Directors evaluated performance of thenon-independent Directors and the Board as a whole. They also reviewed the performance ofthe Chairman of the Company and also assessed the quality quantity and timelines of howof information between the Company Management and the Board that was necessary for theBoard to effectively and reasonably perform their duties.
Also as required the Board assessed the performance of the Independent Directors asper the criteria laid down and have recommended their continuation on the Board of theCompany.
The Board of Directors assessed the performance of the individual Directors on theBoard based on parameters such as relevant experience and skills ability and willingnessto speak up focus on shareholder value creation governance standards knowledge ofbusiness processes and procedures followed openness of discussion/integrityrelationship with management impact on key management decisions etc. The members of theCommittee of Audit Nomination & Remuneration and Stakeholders Relationship were alsoassessed on the above parameters and also in the context of the Committee's effectivenessvis-a-vis the Act and the listing requirements.
DISCLOSURE ON CONFIRMATION WITH THE SECRETARIAL STANDARDS:
Your Directors confirm that the Secretarial Standards issued by the Institute ofCompany Secretaries of India have been duly complied with.
The Report on Corporate Governance together with the Statutory Auditors' Certificatethereon are annexed hereto and forms part of this Report. The Management Discussion andAnalysis Report are annexed hereto and forms part of this Report.
The Company has also adopted the mandatory policy on Sexual Harassment of Women atWorkplace (Prevention Prohibition & Redressal) Act 2013. Employees have beensensitized on the provisions of this enactment and the Company has also constituted aninternal complaints committee with effect from 28th May 2015 to deal withcomplaints if any under the said Act. There was no complaint received during the year toreport.
ADEQUACY OF INTERNAL CONTROLS
Your Company has in place adequate internal control systems combined with delegation ofpowers and periodic review of the process. The control system is also supported byinternal audits and management reviews with documented policies and procedures.
ISSUE OF SHARES
During the year under review the Company has not issued any Sweat equity shares orshares with differential rights or under Employee Stock Option Scheme nor did it buy-backany of its shares.
None of the Directors are disqualified under the provisions of Section 164(2) of theCompanies Act 2013. The Directors have made the requisite disclosures as required underthe provisions of the Companies Act 2013.
Your Directors would like to express their sincere appreciation to the variousDepartments of the Central and State Governments UPSIDC's directors and Investors fortheir continued valuable support and assistance. Your Directors also wish to thank all theOfficers and Staff of the Company at all levels for their contribution support andcontinued co-operation throughout the year.
| || |
For and on behalf of the Board
|Place : New Delhi ||(Manish K. Modi) ||(M. K. Modi) |
|Dated : 18th July 2018 ||Managing Director ||Chairman |